Reference no: EM132492423

Question 1: Since you always dreamed of being an entrepreneur you opened a new company called "The Frozen Truck" on June 1st. Shortly thereafter, you got in touch with a company called "La Paleteria". This company manufactures paletas, a Mexican style popsicle with a smooth texture and made from real fruits. Since you loved this product so much you decided to commercialize paletas using a food truck during outdoor events. For this purpose your bank granted you a $5,000 loan. According the contract, the principal plus interest (calculated at 12% per year) have to be repaid in 6 months. Here are some transactions that occured during your first month of operation (June):

Journal Entries

1. On June 1st, you signed a 2-year contract to lease a food truck for $200 per month. You had to pay the first two months up front.
2. On the same date, you purchased a freezer for $2,400 cash. The estimated useful life is 20 years.
3. On June 5th, you received $40 as a birthday gift from your grandmother. Feeling happy, you went to the movies with your partner. Tickets were $12 each.
4. On June 10th, you purchased inventory from La Paleteria for $800. The amount was put on account.
5. On June 12th, you purchased gasoline for the food truck worth $82.
6. On June 15th, you went to Coaticook and Sherbrooke to participate in different events. You sold 250 paletas at $5 each.